HomeMy WebLinkAboutRes2018-082 Sponsored by: Bridge=
CITY OF SEWARD,ALASKA
RESOLUTION 2018-082
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING THE ELECTRIC UTILITY MANAGER TO
SIGN THE MEMORANDUM OF UNDERSTANDING FOR THE
CREATION OF THE RAILBELT RELIABILITY COUNCIL AND
SUBMIT TO THE REGULATORY COMMISSION OF ALASKA
WHEREAS, the Regulatory Commission of Alaska (RCA) is intent on seeing this
organization formed; and
WHEREAS, one of the main objectives of all electric utilities is the reliability of the
power provided to consumers; and
WHEREAS, another main objective of all electric utilities is to deliver power at the
lowest cost to its consumers; and
WHEREAS, the six Railbelt Utilities, including Golden Valley Electric Association
(GVEA) in Fairbanks, Matanuska Electric Association (MEA) in the Palmer/Wasilla area,
Municipal Light and Power(ML&P) in Anchorage, Chugach Electric Association (CEA) also in
Anchorage, Homer Electric Association (HEA) in Soldotna/Homer area, and the City of Seward
(SES) or (COS) in Seward, are working on the formation of the Railbelt Reliability Council
(RRC)to ensure its consumers a more reliable service; and
WHEREAS, the RRC is a precursor to a Railbelt-wide economic dispatch organization;
and
WHEREAS, having an RRC-type organization gives Independent Power Producers
(IPP)an opportunity to build generation and sell to the electric grid; and
WHEREAS, if funding is required in support of the deliverables as outlined in the MOU,
a separate resolution will come before Seward City Council for approval; and
WHEREAS,this organizational model is similar to many areas around the country.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD,ALASKA that:
Section 1. The Electric Utility Manager is hereby authorized to sign the Memorandum of
Understanding (MOU) on behalf of the City of Seward for the creation of the Railbelt Reliability
Council (RRC)and submit to the Regulatory Commission of Alaska(RCA).
Section 2. This resolution shall take effect immediately upon adoption.
CITY OF SEWARD,ALASKA
RESOLUTION 2018-082
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 1s`
day of October, 2018.
THE CITY OF SEWARD,ALASKA
0)CLQ/12//li ) (AYs
Mari nna Keil,Vice Ma or
AYES: Seese, McClure, Towsley, Casagranda, Horn, Keil
NOES: None
ABSENT: Squires
ABSTAIN: None
ATTEST:
� 4VA, •
renda J. Bailout C
City Clerk
(City Sea141,4•y pF
7 • SEAT,
`mm OF
111 Os diildd FB t u'4�9
FISCAL NOTE: Funding for this organization is unknown at this time, but will come from
member dues and an annual administrative fee approved by the RCA before implementation.
See section 8 of the MOU.
Approved by Finance Department: ��
ATTORNEY REVIEW: Yes X No
RECOMMENDATION:
--------
Council approve Resolution 2018-082, approving the Memorandum of Understanding for the
creation of the Rail belt Reliability Council.
Page 1 of 6
Railbelt Reliability Council (RRC)
MEMORANDUM OF UNDERSTANDING (MOU)
Among
Anchorage Municipal Light and Power
Chugach Electric Association
Golden Valley Electric Association
Homer Electric Association
Matanuska Electric Association
Seward Electric System
(Railbelt Utilities)
September 4, 2018
1. Railbelt Utilities. This Memorandum of Understanding (MOU) is made and
entered into among Chugach Electric Association, Golden Valley Electric Association, Homer
Electric Association, Matanuska Electric Association, Anchorage Municipal Light and Power,
and Seward Electric System (Railbelt Utilities).
2. Purpose. This MOU memorializes the agreement by the Railbelt Utilities to
proceed with the creation of the Railbelt Reliability Council (RRC) and the concurrent adoption
by the RRC of a formal Business Plan (Plan) that when implemented will ensure reliability
benefits for electric consumers in the Railbelt. This MOU outlines possible RRC functions as
identified in Section 4 and operations necessary to realize those benefits including regulatory
oversight, scope of responsibility and authority, governance structure, and funding which will be
key components of the Plan. The Plan is anticipated to be completed by the end of first quarter of
2019. The Plan and quarterly updates of the Plan’s status will be filed with the Regulatory
Commission of Alaska (RCA).
3. General Provisions.
A. Amendments. Any changes, modifications, revisions or amendments to
this MOU require unanimous agreement amongst the Railbelt Utilities and
shall be incorporated in writing, and effective when executed and signed
by all Railbelt Utilities.
B. Entirety of the MOU. This MOU represents the entire, integrated
agreement between the Railbelt Utilities related to the creation of an RRC
and supersedes the Memorandum of Understanding for Electrical
Reliability Standards dated October 11, 2017.
Page 2 of 6
C. Term. This MOU is effective upon the day and date last signed and
executed by the authorized representatives of the Railbelt Utilities to this
MOU and shall remain in full force and effect until the creation of the
RRC and its adoption of the Plan unless otherwise unanimously agreed to
by the Railbelt Utilities.
D. Regulatory Compact. The parties to this MOU agree that the articles of
incorporation and bylaws of the RRC, when adopted and submitted to the
RCA for approval shall constitute a regulatory compact with the State of
Alaska, valid and binding upon the parties. Once the articles and bylaws of
the RRC are approved/accepted by the RCA, the parties agree to be bound
by decisions of the RRC and any subsidiary organizations organized by
that RRC to the extent provided for in the articles and by-laws. If and to
the extent required by statute, the RRC will obtain a Certificate of Public
Convenience and Necessity (CPCN).
E. Benefit. The agreements and obligations contained in this MOU are for
the benefit of all Railbelt Utilities, individually and collectively.
4. Railbelt Reliability Council. A stakeholder driven entity shall be :
A. A non-profit corporation;
B. Organized under the laws of the State of Alaska; and
C. Subject to the jurisdiction of the RCA under the terms of its articles and
bylaws that shall provide for appeal of RRC decisions to the RCA.
Established to:
D. Reliability Standards. Adopt, administer, and enforce Railbelt electric
system reliability standards including cyber and physical security that:
(i) Recognize the unique nature of the Railbelt Transmission System;
(ii) Are mandatory and enforceable Railbelt wide planning and operating
standards allowing for local criteria;
(iii) Are technically sound standards for operations, planning, and physical
and cyber security;
(iv) Include a compliance monitoring and enforcement program that is
subject to the review and approval of the RCA; and
(v) Comply with and implement the Electric Reliability Standards agreed
to by the Railbelt Utilities and submitted to the RCA on April 17,
2018. The Standards described above will serve as the RRC’s
“Version 1.0” reliability standards for adoption, administration,
monitoring, and enforcement.
Page 3 of 6
E. Interconnection Protocols. Develop, adopt, and administer a non-
discriminatory, generator interconnection study process and related
interconnection protocols.
F. System Planning. Develop, adopt, and utilize a Railbelt electric a
system wide generation and transmission planning process, to the extent
necessary, utilizing the Railbelt reliability planning standards adopted by
the RRC that:
(i) Addresses the system reliability issues that pose an unacceptable risk
to the integrity of the Railbelt transmission system;
(ii) Permits individual utilities the flexibility to develop and implement
local planning criteria;
(iii) Maximizes the capability of delivery of existing resources to load;
(iv) Permits efficient economic integration of new generation resources;
(v) Creates a Railbelt Integrated Resource Plan (IRP) identifying new
generation and transmission projects if demonstrated to satisfy
reliability requirements and being economically justified; and
(vi) Develops and maintains the system planning and simulation model for
use by all Railbelt Utilities.
G. System Dispatch. Perform a cost benefit analysis of a security
constrained economic system dispatch function that determines the extent
that the economic benefits sufficiently offset the startup and ongoing
operating costs. The cost benefit analysis will:
(i) Be performed per the cost benefit model adopted and utilized by the
system planning stakeholder function of the RRC.
(ii) Study various configurations including single and multiple load-
balancing areas within the Railbelt to determine the most cost-
effective security constrained economic dispatch configuration.
(iii) Reflect the effects of existing power purchase and sales contracts, fuel
supply and transportation agreements, etc. and any costs associated
with eliminating or modifying these contracts as applicable to specific
study cases.
5. Other Railbelt Organizations. In conjunction with the RRC development,
the Railbelt Utilities are evaluating and planning, pending Board approvals, to develop a Railbelt
Transmission Organization (TRANSCO). Any TRANSCO CPCN filing will include the
negotiated base cost allocation. The cost allocation for new assets will be adjusted based on
relative changes in load.
Page 4 of 6
6. Organizational Structure. The RRC organization will be structured as follows:
A. Governance. The RRC will be governed by a Board of Directors (BoD)
that will consist of 13 individuals of which there will be 12 voting
members and the CEO as tie-breaker vote only. The voting members will
consist of representatives from each of the six Railbelt Utilities, and from
six non-utility stakeholders. The six non-utility stakeholders will be the
Alaska Energy Authority, Regulatory Affairs and Public Advocacy
(RAPA), two independent power producers (IPP), and two outside non-
affiliated members with experience in utility operations and planning
functions. The Plan will outline a process by which the IPP and non-
affiliated members will be nominated and confirmed. The RCA will
designate a commissioner to be a non-voting member. The CEO will be
the RRC chairperson. When a Transco is formed and certificated as a
public utility it will be added as a voting member. The bylaws shall
prescribe the method for selecting directors. The number of Railbelt
Utilities and non-utility stakeholders serving as voting members on the
BoD must be equal at all times.
B. Technical Advisory Committee (TAC). The TAC will be a working group
of qualified technical professionals with specific operational, system
planning, and management responsibilities that will provide for
monitoring of the utilities’ compliance with the Reliability Standards and
make recommendations to the BoD as appropriate or other BoD as
requested scope of authority duties. The bylaws shall prescribe the method
for selecting members of the TAC.
C. Audit and Finance Committee (AFC). The AFC will be a working group
of qualified technical professionals with specific financial and auditing
experience that will insure the financial health of the organization. The
bylaws shall prescribe the method for selecting members of the Audit and
Finance Committee.
D. Staff. The staff will consist of a CEO and qualified technical
professionals to provide ongoing expertise in the areas of power grid
operations, modeling, reliability, rates, analysis, and IT.
E. Members. The entities represented on the BoD will be the initial members
of the RRC. The RRC may evaluate the need in the future for an expanded
member organization that incorporates sector stakeholders similar to the
NEPOOL or ERCOT system.
7. Organizational Controls. RRC organizational controls will be developed,
adopted, and implemented. Compliance with the organization’s articles, bylaws, code of conduct,
and policies and procedures for the BoD, TAC, AFC, RRC staff, and members will be
Page 5 of 6
mandatory. Requirements for the RRC not specifically stated in this MOU will be detailed in the
written control documents mentioned and include but not be limited to the following:
A. BoD. Duties and powers; composition; positions and titles; voting rights,
proxies, and quorums; qualifications; how selected; terms of members;
filing of vacancies and removals; actions w/o meetings; committees.
B. TAC. Duties and responsibilities; scope of activities; composition and
qualifications.
C. AFC. Duties and responsibilities; scope of activities; composition and
qualifications.
D. RRC Staff. Duties and responsibilities; scope of activities; titles; and
composition and qualifications.
8. Funding. The RRC will fund its operations through member dues and an
annual system administration fee collected from users within the Railbelt pursuant to RRC
protocol and as approved by the RRC BoD and the RCA for recovery.
9. Implementation Committee. Following the execution of this MOU, an
Implementation Committee will function as described below.
A. Composition. The Implementation Committee will have the same
configuration as the BoD in Section 6.A of this agreement. Each
constituency will select its own representative(s) and the RCA will appoint
the two unaffiliated members.
B. Scope. The Implementation Committee will be responsible for developing
the Plan, hiring services to assist in developing the Plan, developing the
annual staffing plan and operating budgets for the first 3 years of the RRC,
meet as necessary in person or by electronic means, and keep meeting
minutes.
C. Costs. Ninety percent (90%) of the cost to develop the Plan will be
allocated to the six Railbelt utilities based on load ratio sharing calculated
from 2017 energy usage. The balance of the costs will be shared equally
between AEA and the IPP representatives.
D. Deliverables. The Implementation Committee will be responsible for
creating the Plan, written control documents, and professional
qualifications for BoD, TAC, and AFC.
Page 6 of 6
Railbelt Reliability Council MOU
August 20, 2018
ANCHORAGE MUNICIPAL LIGHT & POWER CHUGACH ELECTRIC ASSOC., INC.
By: By:
Mark Johnston, General Manager Lee Thibert, Chief Executive Officer
Date: Date:
GOLDEN VALLEY ELECTRIC ASSOC., INC. HOMER ELECTRIC ASSOC., INC.
By: By:
Cory Borgeson, Chief Executive Officer Bradley P. Janorschke, General Manager
Date: Date:
MATANUSKA ELECTRIC ASSOC., INC. SEWARD ELECTRIC SYSTEM
By: By:
Anthony M. Izzo, CEO/General Manager John Foutz, Utility Manager
Date: Date: